Marlene Grecco

U.S. Homeownership Rate Rises to Highest Point in 8 Years

May 04, 2020

For
nearly two months, most of us have been following strict stay-at-home
orders from our state and local governments. It is a whole new way of
life that has put our daily lives on pause. On the other hand, many of
us have also found a sense of comfort by slowing down and spending time
at home, highlighting the feeling of security that comes with having a
much-needed safe place for our families to live.

The latest results of the Housing Vacancy Survey (HVS) provided by the U.S. Census Bureau
shows how Americans place immense value in homeownership, and it is
continuing to grow in the United States. The results indicate that the
homeownership rate increased to 65.3% for the first quarter of 2020, a
number that has been rising since 2016 and is the highest we’ve seen in
eight years (see graph below):Why is the rate increasing? The National Association of Home Builders (NAHB)explained:

“Strong
owner household formation with around 2.7 million homeowners added in
the first quarter has driven up the homeownership rate, especially under
the decreasing mortgage interest rates and strong new home sales and
existing home sales in the first two months before the COVID-19 pandemic
hit the economy.”

The NAHB also emphasizes the year-over-year increase in each generational group:

“The
homeownership rates among all age groups increased in the first quarter
2020. Households under 35, mostly first-time homebuyers, registered the
largest gains, with the homeownership rate up 1.9 percentage points
from a year ago. Households ages 35-44 experienced a 1.2 percentage
points gain, followed by the 55-64 age group (a 0.9 percentage point
increase), the 45-54 age group (a 0.8 percentage point gain), and the
65+ group age (up by 0.2 percentage point).” (See chart below):

Homeownership is an important part of the American dream,
especially in moments like this when many are feeling incredibly
grateful for the home they have to shelter in place with their families.
COVID-19 may be slowing our lives down, but it is showing us the
emotional value of homeownership too.

Bottom Line

If
you’re considering buying a home this year, contact a local real estate
professional to set a plan that will help you get one step closer to
achieving your dream.

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